Centrica boss Sam Laidlaw throws his bonus overboard
Sam Laidlaw to donate payout to charity as he admits trust in energy sector is at ‘all-time low’
The head of Centrica, the British Gas owner, has revealed he will not take a bonus this year as anger continues to grow about soaring household bills.
Sam Laidlaw, the chief executive, admitted trust in the energy sector is at an “all-time low” and said it urgently needed to rebuild its relationship with consumers. British Gas has hit more than 8 million customers with a 9.2 per cent average increase in bills from 23 November, putting up the average bill to £1,444 per household.
Speaking at the CBI annual conference in London, Mr Laidlaw said he had “already decided” not to take his bonus. There was a need for leadership in the current environment, he said, adding that it had to be balanced with being able to attract employees.
“Just to continue in this world where households are under pressure, and assume it is business as normal, is not the way thoughtful remuneration committees think about it,” he added. When asked whether other directors would also forego bonuses, the company said that Mr Laidlaw’s decision was a “personal one”.
The energy boss received £4.95m last year, including £950,000 in basic pay, £1.04m in annual and deferred bonuses and £2.6m in long-term share schemes. The bonus is being given to charity but a spokesman was unable to confirm which elements of it Mr Laidlaw was to give up. Last year he gave his old yacht Bob, co-owned by BP’s former chief executive Tony Hayward, to the charity Toe in the Water.
Addressing the CBI, he said the energy industry was “in the eye of the storm” and repeated the industry’s pledge to cut bills if the Government switches environment and social costs to other forms of taxation.
Mr Laidlaw said his company had reduced its costs by £300m over the past few years, and would immediately pass on any reductions in the social and environmental part of energy bills. “We are listening – we get it, absolutely. We know there is a problem,” he added.
Centrica is one of the Big Six household energy companies at the centre of a fierce political debate over the cost of living, which was stoked in September when the Labour leader Ed Miliband promised to freeze energy bills for 20 months if he wins the next election.
The Government has since vowed to “put consumers in control”. Ed Davey, the Energy Secretary, appeared before MPs to unveil reforms to the gas and electricity markets. His biggest pledge was to make switching provider much quicker – down to 24 hours from the five weeks it now takes. He said his department will be consulting on introducing criminal sanctions for anyone manipulating energy markets.
The businesses practices of the Big Six have also been called into question by smallcompetitor Ovo Energy. Its managing director, Stephen Fitzpatrick, told MPs they were buying gas at a lower price than in 2009. “It looks to me like a lot of energy companies are charging the maximum they feel they can get away with to customers they feel will not switch, and maintaining the illusion of competitive pricing with tariffs targeted towards a very small number of well-engaged customers.”
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